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Health savings? No one knows - POLITICO.com Print View
Much of this is in line with what David Leonhardt wrote yesterday on this same topic, though he came at it from a different angle.
It's becoming increasingly clear that the eventual bill that will be passed will have little to do with health care reform and everything to do with health insurance reform. In the end, I'd be surprised if it's much more than an expansion of Medicaid, an increase in subsidies to the poor, and some minor revisions to insurance regulations.
Barack Obama ran for president on a promise of saving the typical family $2,500 a year in lower health care premiums.
But that was then.
No one in the White House is making such a pledge now.
It’s one of the most basic, kitchen-table questions of the entire reform debate: Would the sweeping $900 billion overhaul actually lower spiraling insurance premiums for everyone?
No one really knows.
And in fact, for all the ink spilled on the effects of health care reform, no independent group has taken a comprehensive look at how the legislation would impact premiums for the 170 million Americans who receive insurance through their employers – a population that would receive little direct financial assistance under the various congressional proposals.
For small businesses and individuals who purchase their own plans, economists remain sharply divided over the impact on premiums.
Obama was the one who raised expectations of lower premiums. From one city to the next, and during the presidential debates, Obama made the pledge almost as often as he vowed to remove troops from Iraq: “We estimate we can cut the average family’s premium by about $2,500 per year.”
He has barely uttered it since taking office. The last recorded mention by Obama was in May, when he announced that six health industry groups agreed to lower the growth rate in health care spending by $2 trillion over 10 years, resulting in a savings of $2,500 per family “in the coming years.”
Campaign advisers sought to make Obama’s plan tangible to voters. But the $2,500 estimate was controversial, even among progressive health care economists. First, the figure represented not simply a family’s share of premiums, but also savings that would accrue for employers, Medicare and Medicaid. Second, experts did not expect the savings to materialize for many years.
David Cutler, a Harvard University economist who helped develop the estimate for the Obama campaign, said the savings are still achievable, but perhaps not for a decade. It depends almost entirely on whether Congress is strict about reducing the growth rate of health care spending in Medicare and Medicaid – and the private sector follows the government’s lead in wringing inefficiencies and waste out of the system.
“Far and away, what happens to premiums is dependent on whether you can bend the cost curve,” Cutler said.
And there are questions as to whether the bills even meet that goal.
Gruber, the favorite economist of the White House, said the bill “really doesn’t bend the cost curve.”
Much of this is in line with what David Leonhardt wrote yesterday on this same topic, though he came at it from a different angle.
It's becoming increasingly clear that the eventual bill that will be passed will have little to do with health care reform and everything to do with health insurance reform. In the end, I'd be surprised if it's much more than an expansion of Medicaid, an increase in subsidies to the poor, and some minor revisions to insurance regulations.